AltStreet

Secondary Startup & Pre-IPO Markets

Accessing late-stage private companies before IPO through secondary marketplaces, funds, and tender offers.

Market Size
$50B+ annual secondary transactions; $7T total private company valuation globally
Typical Returns
Secondary shares: -50% to +500% (highly variable); Pre-IPO funds: 15-30% IRR (top quartile); Median: 8-15% IRR

Overview

Secondary startup and pre-IPO markets provide access to late-stage private companies before public listing through secondary share marketplaces, tender offers, and growth equity vehicles. Market size: $50B+ secondary market transactions annually (2024). Investment access via: (1) Secondary marketplaces (EquityZen, Forge, Carta), (2) Pre-IPO funds (SharesPost, Linqto), (3) SPVs and syndicates (AngelList, Republic), (4) Employee liquidity programs. Typical companies: Stripe, SpaceX, Databricks, Discord (pre-IPO unicorns). Returns: -50% to +500% depending on entry valuation and exit timing. Minimums: $10K-$100K depending on platform. Key advantages: Access to high-growth companies pre-IPO, earlier exit than VC funds (2-3 years vs. 10 years). Risks: Illiquidity (1-3 year lockups), valuation uncertainty, and IPO timing/market conditions.

Key Benefits

  • Pre-IPO access: Invest in unicorns (Stripe, SpaceX, Databricks) years before public listing; capture late-stage appreciation
  • Shorter duration: 2-3 year holds until IPO/acquisition vs. 10-year VC fund lockups; faster liquidity
  • Lower risk than early-stage: Late-stage companies have proven business models, revenues, customers; 80%+ survival rates vs. 10% for seed
  • Portfolio diversification: Access to private markets uncorrelated with public equities; venture returns without VC fund commitment
  • Transparent pricing: Secondary markets provide price discovery vs. opaque VC valuations; see bid/ask spreads
  • Fractional ownership: $10K-$100K minimums vs. $1M+ direct VC investments; democratizes private markets
  • Employee liquidity: Many shares from employees seeking cash; motivated sellers create opportunities

Latest Research & Analysis

View All
The Insider's Guide to the Secondary Market: Accessing Pre-IPO Innovation
secondary-pre-ipo-markets•Nov 22, 2025

The Insider's Guide to the Secondary Market: Accessing Pre-IPO Innovation

Get into unicorns before IPO. Learn how secondary marketplaces, employee liquidity, and late-stage equity open access to the $100B private markets.

Top Platforms & Investment Options

EquityZen

$10,000 per company

Largest secondary marketplace. 300+ private companies (Stripe, SpaceX, Databricks, Discord, Chime). Minimum $10K-$100K per investment. Accredited investors. Typical discounts: 15-30% to last funding round. Transaction time: 3-6 months. Due diligence support. $3B+ transacted.

Visit Platform

Forge Global

$100,000 per company

Secondary marketplace and data platform. 400+ companies. Minimum $100K per investment. Accredited investors. Forge Data provides private company valuations and liquidity insights. Transaction execution and custody. Higher minimums than EquityZen but larger deal flow.

Visit Platform

Carta (CartaX)

$10,000+ (varies)

Cap table management and secondary marketplace. CartaX facilitates tender offers and employee liquidity. Company-controlled (only participate if company enables). Minimum varies ($10K-$50K). Fastest-growing secondary platform. 40K+ companies on Carta; subset available for trading.

Visit Platform

SharesPost (Forge Company)

$2,500 for funds

Pre-IPO fund and secondary marketplace (now part of Forge). SharesPost 100 Fund: Diversified portfolio (20-30 late-stage companies). Minimum $2,500. Target 15-25% IRR. 3-5 year fund life. Lower barriers than direct secondary purchases. Some quarterly liquidity.

Visit Platform

Linqto

$2,500 per company

Pre-IPO investment platform. 30+ companies available. Minimum $2,500-$10K per company. Fractional shares (own $5K of SpaceX vs. $100K minimum elsewhere). Accredited investors. Emphasizes accessibility and lower minimums. Transaction time: 2-4 months.

Visit Platform

AngelList

$1,000 for funds

Startup investing platform. SPVs (Special Purpose Vehicles) and roll-up funds for late-stage deals. Minimum $1K-$5K for funds, $1K-$25K for direct deals. Accredited investors. Emphasis on transparency (deal terms, valuations). 7-10 year lockups (longer than secondary marketplaces).

Visit Platform

Republic

$100+ per offering

Equity crowdfunding and late-stage platform. Occasional pre-IPO offerings (past: Robinhood, Coinbase secondaries). Minimum $100-$1K. Not accredited-only (Reg CF). Lower barriers but limited deal flow. Secondary offerings rare; mostly early-stage.

Visit Platform

Accessing Secondary & Pre-IPO Markets

1

Start with Established Marketplaces

EquityZen and Forge offer secondary shares in 300+ private companies (Stripe, SpaceX, Databricks, Discord). Minimums $10K-$100K. Due diligence: Revenue growth, burn rate, competitive position. Transactions take 3-6 months (legal, compliance). Accredited investors only. Diversify across 3-5 companies.

2

Explore Pre-IPO Funds

SharesPost funds offer diversified pre-IPO portfolios (20-30 companies). Minimum $2,500 (SharesPost) to $25K (others). Target 15-25% IRR. 3-5 year fund life. Professional selection reduces single-company risk. Some quarterly liquidity via secondary sales. Lower minimums than direct purchases.

3

Understand Valuation Risk

Secondary shares trade at 10-40% discount to last primary round (409A valuation). But if company down-rounds or IPO below valuation, losses significant. Stripe $95B valuation (2021), $50B (2023) = -47%. Assess valuation relative to public comparables (revenue multiples, growth rates).

4

Assess IPO Timing and Lock-Ups

Average time to liquidity: 2-3 years. IPO lock-ups add 6 months. If IPO delayed (market conditions, company readiness), capital tied up longer. Secondary shares often have 12-month transfer restrictions. Factor illiquidity into allocation; recommend <5-10% of portfolio.

Secondary & Pre-IPO Market Risks

Important considerations before investing in secondary startup & pre-ipo markets

  • Valuation risk: Companies often overvalued at late-stage; Stripe $95B (2021) → $50B (2023). Down-rounds wipe out returns
  • Illiquidity: 1-3 year holds until IPO; no guaranteed exit; if IPO delayed/cancelled, capital tied up indefinitely
  • IPO market timing: 2022-2023 IPO window closed; companies delayed listings; secondary buyers faced extended holds
  • Information asymmetry: Limited financials available; rely on company presentations (often optimistic); insiders know more
  • Lock-up periods: Post-IPO, shares locked 6 months; can't sell even if stock crashes (Rivian IPO: $170 → $15 in 6 months)
  • Regulatory risk: SEC scrutiny on secondary markets; changing rules on who can participate and disclosure requirements
  • Platform risk: If EquityZen, Forge shuts down, share ownership may be unclear; escrow arrangements critical
  • Concentration: Single company = binary outcome; successful companies (Uber, Airbnb) coexist with failures (WeWork)

Due Diligence Checklist

  • Verify valuation vs. public comps: Compare revenue multiples to public companies; Stripe 30x revenue vs. public SaaS 8x = overvalued
  • Check revenue growth trajectory: Is growth accelerating or decelerating? Late-stage companies slowing <30% growth face down-rounds
  • Assess burn rate and runway: How long until profitability or next funding? <18 months runway = dilution risk
  • Understand liquidity terms: How long until likely IPO? 2-3 years typical but check market conditions, company readiness
  • Review share class: Common shares (employees) vs. preferred (VCs). Common have no liquidation preference; get paid last
  • Check transfer restrictions: Most shares have 12-month restrictions; verify you can sell after lock-up expires
  • Diversify across 3-5 companies: Single pre-IPO bet = lottery ticket; portfolio approach captures winners, limits individual failures
  • Compare to IPO pop: Average IPO pops 20-40% on Day 1; if buying at last private valuation, may be better to wait for IPO

Real-World Examples

Uber secondary (2015): Bought at $50B valuation, IPO 2019 at $75B (+50%), but stock fell to $30B in months. Early secondary buyers: breakeven to slight loss.

Stripe secondary (2021): Bought at $95B valuation. Valuation cut to $50B (2023). Current holders: -47% unrealized loss. Illustrates late-stage valuation risk.

SpaceX secondary (2019): Bought at $46B valuation. Now $180B (2024) = +291%. No liquidity yet (still private) but strong paper gains for patient investors.

EquityZen portfolio study: 50 companies (2015-2023). Median return: +35% over 3 years (10% IRR). Top quartile: +150% (35% IRR). Bottom quartile: -60% (down-rounds/failures).

WeWork secondary (2019): Bought at $47B valuation (pre-IPO). IPO cancelled, valuation fell to $2.9B (2020) = -94%. Total loss for late-stage buyers. Extreme failure case.

Explore Subcategories

Secondary Share Marketplaces

Platforms like EquityZen, Forge, and Carta that match sellers and buyers of private company shares.

Learn more

Employee Liquidity & Tender Offers

How employees and early investors get liquidity through tender offers and secondary sales.

Learn more

Late-Stage Growth Equity Vehicles

Funds and syndicates that specialize in pre-IPO and late-stage growth rounds.

Learn more

Pre-IPO Pricing & Risk

Valuation, liquidity, and governance risks when investing pre-IPO.

Learn more